Capital requirements may force out 30 Russian banks in 2012

Some 20-30 Russian banks may be squeezed out of the market next year over their inability to meet new minimum capital requirements, a Central Bank official said on Wednesday.

“By the beginning of next year, there will be about 20, 25 or 30 banks that will quit the market… This can be done by various methods, including comfortable options for bankers,” Mikhail Sukhov, director of the Central Bank’s department for credit institutions’ licensing and financial recovery, said in an interview with the RBC business TV channel.

Under the strategy for the banking sector development to 2015, the minimal capital for existing banks will double to 180 million rubles from January 1, 2012 and rise to 300 million rubles from 2015. As for new banks, their minimal capital will be 300 million rubles beginning in 2012.

Today 103 out of the country’s 930 operating banks had less than 180 million rubles in equity as of November 1, 2011, and need to raise 5 billion rubles overall to meet their capital requirements. A total of 30 banks have already raised their capital level and merely need to complete registration procedures, while another eight banks have capital of 175 million rubles. The majority of the remaining 65 banks have confirmed their intention to enlarge their charter capital, Sukhov said.

As for the next target of 300 million rubles, a total of 319 banks will have to attract funds to meet the 2015 requirements.

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